The Indian rupee ended slightly higher on Wednesday as traders pared long dollar positions after expected corporate demand did not materialise, though concerns about a likely US interest rate hike and costly oil weighed.
The rupee closed at 46.3500/3700 per dollar, slightly stronger than Tuesday's 46.3850/4050.
"The market is not likely to move much till August 10, when the US Federal Open Market Committee announces its decision on interest rates," said a trader at a state-run bank.
The United States is expected to raise its fed funds rate by another 25 basis points to 1.50 percent, having raised the rate on June 30 for the first time after three years of cuts.
The bearish outlook for the rupee made the dollar costlier in the forward market.
The six-month dollar traded at an annualised premium of 2.55 percent against 2.41 percent on Tuesday.